The centre of the book trade in Baghdad is al-Mutanabi Street, which runs between the Tigris and Rashid Street, now shabby and decayed but once the city’s commercial heart. The bookshops are small, and open all the time; on Friday there’s a market, when vendors lay out their books in Arabic and English on mats on the dusty and broken surface of the road. Most are second-hand. In the 1990s, after the first Gulf War, I used to walk around the district looking at books, often English classics once owned by students. Difficult words were underlined and translated into Arabic in the margin. There was plenty of stock as the Iraqi intelligentsia, progressively ruined by sanctions, sold off their libraries.

The market was carefully monitored by a section of al-Amn al-Amm, the General Security Service, led by Major Jammal Askar, a poet who used to write verses in praise of Saddam. He oversaw the banning of books on modern Iraq, mostly histories and memoirs written by exiles, and works by Shiite and Sunni clerics. Even so, books, often printed in Beirut, were smuggled in through Jordan, Syria and Turkey. ‘You could bribe the officials at the border to let in religious books, but not political books,’ one bookseller said. ‘We used to take off the covers and replace them with the covers of Baath Party books which they approved of.’ Often only one copy was brought in, photocopied a hundred or more times and then sold covertly. The Amn al-Amm, its operations on the street led by a certain Captain Khalid, launched repeated raids to find out who was selling them.

In 1999 my brother Andrew and I wrote a history of Iraq after the first Gulf War called Out of the Ashes: The Resurrection of Saddam Hussein. It was later republished in Britain as Saddam Hussein: An American Obsession. I knew the regime wouldn’t like it because of its sympathetic treatment of the Shiite and Kurdish uprisings of 1991 and its account of the feuds within the ruling family, and decided after publication that it would be wise to keep out of Baghdad for a few years. When it became obvious that the White House was determined to overthrow Saddam Hussein, I applied to the Iraqi Information Ministry for a visa, although I was worried about how safe it was to do so. Saddam Hussein wasn’t short of critics, and possibly the regime didn’t know or care what Andrew and I had written about them. On the other hand, Saddam had hanged Farzad Bazoft, an Observer journalist, as a spy in 1990. When the Kurds arranged with Syria to let me cross the Tigris in a tin boat into Kurdish-controlled territory in northern Iraq, the problem resolved itself.

It turned out I was right to be nervous. After the fall of Baghdad, the new deputy mayor, a book collector, gave me a copy of Out of the Ashes in a copperplate long-hand translation into Arabic specially made by the Mukhabarat–Iraqi Intelligence. He said it had been found by looters in the house of Sabawi, Saddam’s half-brother who was once the head of al-Amn al-Amm. It turned out that the book was well known to the booksellers in al-Mutanabi Street and had sold well–mainly, they said, because ‘it gave an account of the uprisings in 1991 and of the relationship between Saddam and the US.’

One Friday, halfway along al-Mutanabi, I met Haidar Mohammed, a man in his mid-thirties with nervous, darting eyes, who had been the main seller of my book. He was known in the street as Haidar Majala, meaning Haidar ‘Magazine’, because he pretended that he was only interested in selling magazines. He said that he found life flat since the fall of Saddam, ‘because in the old days, when I had to take a customer down an alleyway to secretly sell him a book and we both knew we could go to jail, life had a taste to it.’ The first copy of Out of the Ashes he bought was an Arabic translation made in Beirut and smuggled into Iraq by a man called ‘Fadhel’, who other booksellers believed was later hanged. Haidar used a photocopier to make 50 copies and sold them to relatives and close friends for two dollars each. He then made another 200 copies and sold them quickly as well. He said: ‘Once when a man who had bought the book was arrested in Kerbala I disappeared for three weeks, but he didn’t give me away and only told them that he’d bought it on the street from a man he didn’t know.’

Haidar, who had been selling books in Baghdad and Najaf since 1994, was finally arrested in November 2000, when he was caught by Captain Khalid with a book by Saad al-Bazzaz, an Iraqi editor, once a Saddam loyalist, who had gone into exile and published an expose of the regime. ‘I pretended I was a little simple and did not know what the book was about,’ Haidar said ruefully. ‘The judge accepted that my story was true so he only gave me two years in prison, though this was extended to three years when they found out I had deserted from the Army.’

The booksellers of al-Mutanabi are relieved that Major Askar and Captain Khalid have disappeared, but are wary of talking of the future. These days they are selling books by Shiite clerics as well as big pictures of Hussein and Abbas, the Shiite martyrs. When I asked a group of booksellers standing beside Haidar what they thought would happen, one said, without much confidence, that ‘Saddam Hussein was difficult to overthrow, but the Americans will be easier to get rid of.’ Iraqis have had difficulty in adjusting to the pace of events since the beginning of this year: the bombing of Baghdad, the fall of Saddam, the looting, the broiling summer without electricity, the banditry and now the sporadic guerrilla attacks and car bombs. New problems appear almost daily. As we walked away from the book market a Kurd came up to us. He had just heard that the US had invited 10,000 Turkish troops into Iraq. ‘I want to tell you the Americans are going to betray us again just as they did in 1975 and 1991,’ he said.

Paul Bremer, the chief US civilian administrator who heads the Coalition Provisional Authority, has been claiming, somewhat ludicrously, that life in Baghdad is back to normal. An energetic and arrogant man, who wears a smart New York suit with army boots protruding from the bottom of his trousers, he is inclined to speak of ‘the extraordinary progress made since liberation’. With each car bomb or attack his tone gets shriller: ‘The terrorists know that the Iraqi people and the Coalition are succeeding in the reconstruction of Iraq.’ Bremer is keen to sell Iraq as a success, and so, of course, is the US President, who mentioned recently that satellite television antennae were sprouting over Baghdad. It is true that the streets look cleaner and the heaps of rubbish are disappearing: 180,000 street cleaners have been hired at three dollars a day. Some of them are assiduously painting curbstones white and yellow. The electricity supply is better and there are fewer power cuts than there were at the height of the summer heat. There are thousands of US-recruited police back on the streets, so Iraqis are less frightened of being robbed, raped or murdered than they were three months ago. They no longer lock themselves in their houses or refuse to send their daughters to school for fear of kidnappers. But they don’t compare the situation today with what things were like during the first two terrible months after the US captured Baghdad: they compare it with life as it was 12 months ago under Saddam Hussein. And for most Iraqis life has not improved. For many it has got worse.

The overwhelming political and economic fact is that 70 per cent of the labour force–12 million people out of a total population of 25 million, according to the Ministry of Labour–are out of work. Engineers try to make a little money selling glasses of tea to passers-by from a table on the pavement. Men stand all day in the markets trying to sell a bunch of blackened bananas or a few cracked plates. As under Saddam Hussein, it’s only the ration of basic foodstuffs provided almost free by the state that fends off starvation. There is a horrible desperation in the hunt for work. A Russian company asked a man who was trying to get a job as a driver about his qualifications. He said he felt he should get the job because, quite apart from his great experience as a driver, he had a live grenade in his pocket. He then showed the grenade to the Russian interviewing him and threatened to remove the pin unless he was immediately taken on.

By allowing the state to dissolve and disbanding the Army, the US, in its ignorance, has brought about a revolutionary change in social and ethnic relations in the country. Everyone who was part of the Sunni-dominated Administration has lost out, which isn’t surprising; but the Government was the only big employer. ‘The first mistake occurred when they disestablished the Army and police forces,’ said Nouri Jafer, the labour under-secretary in the interim government created by the US-appointed Governing Council. ‘This created more unemployment because Saddam Hussein had more than a million in the security forces.’ So far, the new US-trained Army has just one battalion of 700 men in a force which will eventually grow to 40,000. Former conscripts and soldiers queue for hours trying to pick up a final pay-off of $40, and there are often riots. Even former members of the Intelligence service have demonstrated to demand their jobs back. One man, almost in tears, said he had travelled seven times from his home city of Kut, south of Baghdad, and had still not been paid. ‘If the US would just pay the salaries of those who have recently lost their jobs I promise you that resistance attacks would go down by 50 per cent,’ Nahed al-Ghazi, a sheikh in a village north of Baghdad, who had just had a grenade explode in the forecourt of his house because of his supposed pro-American sympathies, told me.

The losers after the convulsions of the last six months are becoming clear. The winners are not. Ethnic relations are rapidly deteriorating. The Sunni, who ruled the country under the Ottomans, the British, the Hashemite monarchy and Saddam Hussein, are frightened by their loss of power. The Shia, the community to which more than 15 million Iraqis belong, hope that their moment has come. But they fear that the US will impose a constitution they do not like and delay an election they would inevitably win. Thanks to the refusal of the Turkish Parliament to allow its territory to be used by the US Army to invade Iraq, the Kurds seemed for a few months to have got what they wanted. They regained their lost lands in the north. They captured the oil city of Kirkuk. But, with the US inviting in 10,000 Turkish troops in the hope of keeping American casualties down, they, too, now see betrayal around every corner. They want Iraq to be a federation in which Iraqi Kurdistan will enjoy something close to independence. Recent meetings between the Kurdistan Democratic Party leader, Massoud Barzani, and Bremer have been chilly. When Bremer said that in a unitary Iraq the Kurds would have their own language and culture, Barzani replied: ‘But we already had that under Saddam.’

Iraqis jokingly call those who have done well out of the collapse and occupation hawasimi or ‘finalists’. This is a reference to Saddam’s prewar claim that Iraqis were about to witness ‘a final battle with the Americans’. Newly recruited policemen are hawasimi, said with a slight sneer. (The same word is used about those who are obviously much better off since the looting of Baghdad.) The US is hopeful that the new police force will be the front line against resistance attacks, but when I asked a policeman, who had just caught a car thief in al-Masbah Street, if he was doing anything to stop assaults on Americans, he replied: ‘That isn’t really our job. What we do is provide security for ordinary Iraqis.’ When police in the town of Hawaija, west of Kirkuk, shot dead a Fedayeen they were warned by local tribesmen to stick to their policing duties if they wanted to stay alive.

The changes in the physical appearance of central Baghdad since mid- summer leave no doubt where power lies. Ever more elaborate fortifications are being built to defend Saddam Hussein’s old Republican Palace where Bremer and the CPA live and work, inside a sort of Forbidden City. It is now surrounded by grey prefabricated concrete walls, with red painted warnings forbidding drivers to stop next to them. The few entrances are protected by tanks and rolls of razor wire. New notices have gone up saying it is not permitted to swim in the Tigris outside the palace, presumably for fear of underwater saboteurs. The British Embassy, abandoning its spacious enclave, has fled inside the Rashid Hotel, its entrance guarded by Nepalese soldiers. In future, it will work from a villa inside the Republican Palace. The attack on the Baghdad Hotel in October led to a new frenzy of construction, with every hotel now sealed off by armed guards. The guards at the hotel where I live say they do not like the concrete defences because they give the impression that something suspicious is going on inside. Since the latest bombings, the US Army has set up a multitude of checkpoints around Baghdad, producing enormous queues of traffic.

It may not be enough. When there was an explosion in the Foreign Ministry, just outside the office of the General Council’s interim foreign minister, Hoshyar Zebari, it was first blamed on a rocket-propelled grenade. But it turned out to have been caused by half a kilo of explosives with a timer–which could have been left there only by a member of the Foreign Ministry staff, about a thousand of whom were inherited from the old regime. ‘We have got the number of suspects down to 80,’ one of Zebari’s security men said triumphantly.

The Americans in Baghdad live in conditions of extraordinary isolation. An Iraqi friend spotted a group of visitors from the US holding a party in a hotel at which the waiters were all wearing turbans reminiscent of the Raj. He went up to one of them and said: ‘I would like to shake you by the hand.’ Gratified, the American did so. ‘Now,’ my friend said, ‘you can go home and say you met at least one real Iraqi.’

The overall mood of Iraqis has darkened over the last months as they have come to feel that, with the UN on the sidelines, they are dealing with an old fashioned colonial regime. Even Mahmoud Othman, a veteran Kurdish politician and a member of the Governing Council, said: ‘The Council has little power. On important issues, like inviting in the Turks or sending 30,000 Iraqi policemen to train in Jordan at a cost of $1.3 billion, the Coalition acts first and tells us afterwards.’ In fact, protests over Ankara’s intervention may have caused the Turkish Government to have second thoughts, though that would be a tribute more to the influence of the Kurds on Washington than the authority of the Governing Council.

The guerrilla attacks are almost entirely confined to the Sunni heartlands north of Baghdad, though they are better planned than they were and are spreading further north towards Kirkuk and Mosul. In early October I went to Baiji, an oil refinery town with a population of 60,000, some 145 miles north of Baghdad, where I was told there’d been an uprising. I was sceptical, suspecting the account was exaggerated, but in the main street a crowd of a thousand was holding up pictures of Saddam Hussein and chanting: ‘With our blood and with our spirit we shall die for you Saddam.’ The previous morning, the local Iraqi police had fired at demonstrators who were demanding the dismissal of the US-appointed police chief and wounded four of them. More protestors gathered and burned down the mayor’s office. The police–300 of them–fled to a nearby US base, where the American officers told them to go back or be sacked. The police refused, saying they would be killed if they did so. The US military command has been trying to leave these confrontations with protestors to Iraqi police to deal with, but finally their tanks moved gingerly back into Baiji, most areas of which remained in the hands of the protestors. In the weeks since, there have been pin-prick guerrilla attacks on US troops with home-made mortars, mines, bombs and Kalashnikovs.

The reasons behind the brief uprising in Baiji are common to all the Iraqi provinces immediately north of Baghdad. There is anger over the loss of jobs in the Army, Security Forces and Civil Service. ‘Half the teachers in the schools have been dismissed because they were Baathists and there is no one to teach our children,’ one man complained. Prices have risen because cheap Iraqi kerosene and bottled gas are being smuggled into Iran and Turkey. Protestors set fire to two Turkish road tankers in the main street. Above all, there is the day to day friction with the occupation forces. ‘My nephew Qusai went onto the roof to fix the TV antenna and the US soldiers shot him dead,’ Faidh Hamid told me. A US patrol had beaten an elderly man half to death with their rifle butts because they thought a mortar had been fired from the window of his house–a Swedish journalist embedded with the US patrol had watched in horror as the beating took place. A 75-year-old merchant was trying to recover $16,000 in Iraqi dinars and $4500 in gold taken from his house in May during a US raid. He showed me the petition he had sent to Baghdad: an official had scribbled a note along the bottom saying the money was being permanently confiscated because a Fedayeen had been found in his house, something the merchant denied.

The US has the military strength to retake a town like Baiji easily enough. But the friction points between occupation forces and Iraqis are so numerous and diverse that there will always be fresh crises. The US lacks allies not seen as its pawns. In Baiji, the local office of the Iraqi National Accord, one of the members of the Governing Council, had been set on fire. There is a self-defeating crudity about the occupation’s methods. US troops routinely tie up those they detain, force them to lie on the ground and put bags over their heads.

Saddam Hussein should not have been a hard act to follow. Iraqis know that he ruined their country with his disastrous wars against Iran and Kuwait. But in Baiji a clerk at the local registration office for births and deaths said he noticed that over the last couple of months parents of newborn babies had started to name them ‘Saddam’.